VeriSign (NASDAQ:VRSN) currently controls the rights to the exclusive registry of .com and .net Internet domain names. The company collects a fixed fee each time individuals or businesses register a new .com or .net domain name, or renew the registration of an existing domain name. We currently have a Trefis price estimate of $36 for VeriSign’s stock, about 24% above the current market price of around $29.
Trefis members have created forecasts for two key drivers of VeriSign’s (NASDAQ:VRSN) stock over the last week: (1) VeriSign Fee for .com / .net Domain Name Purchases & Renewals and (2) Total Number of Internet Domain Names. The member forecasts suggest that VeriSign Fee for .com / .net Domain Name Purchases & Renewals and Total Number of Internet Domain Names will trend mostly in-line with the Trefis forecast. These projections suggest a combined upside of around 1% for VeriSign’s stock.
.com and .net domain names account for around 54% of the $36 Trefis price estimate for VeriSign’s stock. Hence the stock is quite sensitive to (1) VeriSign Fee for .com / .net Domain Name Purchases & Renewals and (2) Total Number of Internet Domain Names. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.
1. VeriSign Fee for .com / .net Domain Name Purchases & Renewals
The average of forecasts for VeriSign Fee for .com / .net Domain Name Purchases & Renewals created by Trefis members indicated a projected increase from $6.60 in 2010 to $8.60 by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from $6.70 in 2010 to $8.50 by the end of the Trefis forecast period. The member estimates imply an upside of 1% to the Trefis price estimate for VeriSign’s stock. In the past, VeriSign Fee for .com / .net Domain Name Purchases & Renewals has increased from $4.80 in 2005 to $6.40 in 2009.
You can drag the forecast trend-line above to express your own view, and see the sensitivity of VeriSign’s stock to VeriSign Fee for .com / .net Domain Name Purchases & Renewals.
Our complete analysis for VeriSign Fee for .com / .net Domain Name Purchases & Renewals is here.
2. Total Number of Internet Domain Names
The average of forecasts for Total Number of Internet Domain Names created by Trefis members indicated a projected increase from 218 million in 2010 to 411 million by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from around 220 million in 2010 to 407 million by the end of the Trefis forecast period. The member estimates imply a small upside to the Trefis price estimate for VeriSign’s stock. In the past, Total Number of Internet Domain Names has increased from 91 million in 2005 to around 193 million in 2009.
You can drag the forecast trend-line above to express your own view, and see the sensitivity of VeriSign’s stock to Total Number of Internet Domain Names.
